Form 941

One of the most important forms HR pros will encounter is IRS Form 941, the Employer's Quarterly Federal Tax Return. The IRS uses Form 941 to determine how much an organization has withheld from its employees’ wages each quarter. In this blog, we will address the key components of Form 941 to provide readers with a clear understanding of this important tax responsibility.

 

What Is IRS Form 941?

IRS Form 941 is a quarterly tax form that employers use to report the following:

• Federal Income Tax Withheld: The amount of federal income tax withheld from employees' paychecks.
• Social Security and Medicare Taxes: The amount of Social Security and Medicare taxes withheld from employee wages, along with the employer’s portion.

Download a blank Form 941 here.

 

Who Is Responsible for Form 941?

Generally, any employer that pays taxed wages to employees is responsible for filing Form 941. Some exceptions do apply. Moreover, seasonal employers who don't pay wages in more than one quarter may be exempt from filing. Additionally, employers of household and agricultural workers may be exempt. If an employer plans to terminate business, they must file one final time and indicate the organization’s closure on the form.

 

When Is Form 941 Due?

You will need to file Form 941 for the first quarter in which you will pay Social Security and Medicare taxes or are subject to federal income tax withholding. Organizations must file for each quarter thereafter. Once you have filed the first form, you must continue to file each quarter. Even if you have nothing new to report, the form can be filled out with zeros. The due date for Form 941 is the final day of the month that follows the end of the quarter. 

The quarters are determined as follows:

• January-March (final date to file: April 30th)
• April-June (final date to file: July 31st)
• July-September (final date to file: October 31st)
• October-December (final date to file: January 31st of following year)

How to Fill Out Form 941

While Form 941 is designed to be user-friendly with prompts to help you complete it, the process of filing can still be overwhelming. The following is a step-by-step guide to completing your Form 941 correctly:

• Basic Information

  This section requires employers to disclose basic company information such as their Employer Identification Number (EIN), business name and address, and the quarter for which they are filing. A company’s EIN is assigned by the IRS.

• Part 1: Tax Liability for the Quarter

  This section requires information regarding the number of employees paid, the total compensation paid by the employer, and the federal taxes withheld from those wages. If no wages, tips, or compensation are subject to Social Security or Medicare tax, filers can move on to line 6.

  If wages are subject to Social Security or Medicare tax, filers must indicate those amounts in the first column and multiply them by the number provided on the form. The product should be recorded in column 2. All of column 2 will eventually be added together to complete a subsequent box. The remaining lines report any adjustments for overpayments or underpayments from previous quarters, such as adjustments for sick pay, tips, or employee contributions to retirement plans.
  
  

• Part 2: Report Tax Deposits

  In this section, you will indicate the tax deposits made during each of the three months that combine to make up the quarter. The summation of the months should equal the amount of total taxes after adjustments and nonrefundable credits, as indicated in line 12 of part 1. 

• Part 3: Address Exemptions

  This section only pertains to employers that are filing for the final time or are exempt from filing because of employee status. 
  
  

• Part 4: Consent for Third-Party-Designee

  The third-party-designee section on IRS Form 941 allows an employer to authorize a third party, such as an accountant, payroll service provider, or tax professional, to discuss the form with the IRS and handle certain matters related to the form’s filing. This can be particularly helpful if you're outsourcing your payroll or tax filing to someone else and want to give them the authority to communicate directly with the IRS on your behalf.

• Part 5: Employer’s Signature

  Finally, the form must be signed by the employer or an authorized representative. This section also includes a declaration that the information provided is accurate to the best of the employer’s knowledge.

Additional Resources

You can also stay informed, educated, and up-to-date with employer tax compliance, using BerniePortal’s comprehensive resources:

• BerniePortal Blog—a one-stop-shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• HR Guides—essential pillars, covering an extensive list of comprehensive HR topics
• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics